Cobalt Creek Property Management has the best advice in Denver, Colorado, on how to buy a new home and rent out the old one. You might think that all you need to do is move out and plant a “For Rent” sign in your front yard.
However, new landlords often make costly mistakes that ruin their dreams of earning money from their old home. Our team of experienced Denver real estate agents and property managers can guide you around common pitfalls and help you maximize your investment.
The Benefits Of Renting
If you’re already thinking of moving, there are several reasons why you should rent out your Denver home instead of selling it. Here are a few of the most significant benefits:
- One of the easiest ways to become a landlord is to rent out a second home.
- Getting your investment property is no more complicated than buying a new home.
- Tenants help you cover your second mortgage.
- You earn extra monthly income.
- Rental property is an excellent investment for retirement.
Before You Put Your House Up For Rent
Before you pick up a “For Rent” sign from your nearest hardware store, find out if your current mortgage will allow you to convert your home into an investment property. Some mortgages require a waiting period, charge a penalty, or require refinancing into a more expensive type of loan.
Read your mortgage terms carefully or contact your lender, so you know what is and isn’t allowed.
What’s The Market Like?
You should also research the going rent for a house like yours in your area. It’s wise to talk with a local property manager at this point. For example, we have vast, current knowledge of the local rental market trends and can tell you what rent landlords with similar properties are receiving.
Costs Vs. Profits
Now that you know how much rent you can charge, you should subtract your carrying costs from that number to calculate how much income you will be earning. These carrying costs include all of the expenses of owning a house: mortgage payments, property taxes, utilities, homeowner’s association dues, pest control, yard work, etc.
You should factor in landlord’s insurance because bad tenants can damage your house and create a huge liability. Doing this math will give you an objective sense of how much renting out your home will be worth, enabling you to make educated investment decisions.
Before You Buy A Second House
When it comes to buying a second house, consult with a lender about whether you can afford the second house and keep the old one as a rental. Ask for a pre-approval letter that will show you the maximum amount you can borrow.
This letter won’t just help you shop for a home in your price range, but it will make you more attractive to sellers. They might be willing to take a lower offer if you have your mortgage virtually squared away already.
How We Can Help
House rental management can be overwhelming for new landlords. With a never-ending list of small tasks to address, it can feel like death by a thousand paper cuts. A quality property management company will take these small tasks off your plate so you can fully enjoy the rewards of being a landlord.
Our property managers will fill vacancies, screen tenants, handle renter communication, take maintenance requests, and get estimates for repairs. Many of our landlords say that our services pay for themselves since we save them time, get them the best rental prices, and retain our happy renters.
At Cobalt Creek Property Management, we are also a full-service real estate broker. So, our agents can help you buy a second home, or if you decide not to rent it out, sell your current home.
Let Us Help You Rent Out That Second House
Are you looking for a Denver property management company to help you rent your second house? Contact us today to get in touch with one of our property management experts.
